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1. Introduction
2. General situation
3. Risk management
4. Defining 'risk'
5. Example: the 2010 BP oil spill
6. Example: launch of the challenger space shuttle
7. Biases in risk decision
8. Cancer cluster at UCSD? The claims
9. Blaming the elevator
10. Epidemiologist's report (1)
11. Epidemiologist's report (2)
12. Intuitive risk perceptions
13. Cancer cluster definition
14. Is the sample representative?
15. "Back of the envelope" calculation
16. Is this enough to be 'greater than expected'?
17. Representativeness heuristic (and bias)
18. Heuristics facilitate decision making efficiency
19. Representativeness heuristic can steer us wrong
20. Representativeness bias
21. Confirmation bias
22. Base rates
23. Ignoring base rates
24. Representativeness and small samples (1)
25. Representativeness and small samples (2)
26. Fundamental fallacy
27. Faith in the 'law' of small numbers
28. Gambler's fallacy
29. Human capacity to perceive patterns
30. Patterns in randomness
31. Seeing patterns that are not there
32. Temporal version of Texas sharpshooter
33. We refuse to attribute deviations to variability
34. Exaggerated confidence in early trends (1)
35. Exaggerated confidence in early trends (2)
36. Exaggerated confidence of own abilities
37. What can you do?
38. Work to prevent a culture of risk
39. Instill a culture of managing risk
40. Summary
41. Thank you!
42. References

Topics Covered

• Defining risk
• Risk decision biases
• Risk decision heuristics
• Perceptions of cancer clusters
• Intuitive risk perceptions
• Representativeness heuristic
• Errors in risk decisions
• Representativeness bias
• Confirmation bias
• Thinking about base rates
• Fallacy of the 'law' of small numbers
• Overconfidence bias
• Invulnerability bias
• Gambler's fallacy
• Belief in the hot hand
• Seeing patterns in random events
• Texas sharpshooter fallacy
• Implications for businesses
• Developing a culture of risk
• Instilling a culture of managing risk

Links

Series:

• Risk Management for Corporate Leaders

Categories:

• Management, Leadership & Organisation

Bite-size Case Studies:

• Space shuttle Challenger: how safety and risk were overlooked

Talk Citation

Publication History

• Published on October 31, 2012